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TMI Blog1987 (11) TMI 135X X X X Extracts X X X X X X X X Extracts X X X X ..... ers in Ludhiana through the Ludhiana Branch of the assessee. The Manager fo the Ludhina Bench released the goods before the bilities were received and honoured by the purchasers. The claim of the assessee was that the assessee was not having the approval of the Indian Banks Association which would have entitled it for being recognised by the various banks for grant of advance against the bilties upto the extent of 75 per cent of the goods transported under the bilties and since its sister concern was recognised, it accordingly used the bilties belonging to sister concern, M/s. Yadav Transport Co., so that it retains its existing customers who were providing it regular incomes. The claim further was that the sister concern M/s. Yadav Transport Co., had no role to play other than providing its printed bilties for which purpose it received some commission. The entire transaction of booking of goods, loading them and then transporting to the destination as also safe delivery was the responsibility of the assessee and these are all supported by challans, summary receipts, truck movement sheets, etc. In respect of the above consignment the goods were delivered to the consignee without th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dav Transport Co., on the assessee, he was of the view that the mere agreement and signing by only one of the partners does not establish any existence of claim. According to him it was an unilateral action. Further the criminal proceedings against the Manager which was initiated is still pending. He, therefore, was of the view that the claim as such is not a genuine claim and same is not, therefore, allowable. The CIT(A) had observed thus in para 6.3 of his order. 3. The assessee is aggrieved by the order of the CIT(A) in not allowing the claim and has come up in appeal before us. The plea of the assessee was that the loss is a genuine one is accepted by the CIT(A), and that it is also accepted by him that the assessee did use the bank's approved bilties of M/s. Yadav Transport Co., it was also accepted that it was an unauthorised action of the employee of the assessee for releasing of the goods without proper documentation and payment. The only objection of the CIT(A) was that since the settlement with the Insurance Co., was reached in 1984 the claim of the assessee did not mature in the year. The plea of the assessee was that since the Department had not come up in appeal in re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . The learned Senior Departmental Representative also emphasised at the variance in figures which started initially with over Rs. 8 lacs and slowly sliding to Rs. 2.65 lacs. The suit by the Insurance Co. was filed in asst. yr. 1983-84 and the amount was paid in 1984-85. According to him under no circumstances it could be held that the liability even if assuming that the assessee was liable as arising in the year as it is not in the nature eof statutory liability or a contractual liability but a liability thrashed upon it under the directions of the Court. He also filed the copy of the account of the assessee in the books of M/s. Yadav Transport Co., and drew our attention to the fact that the amount is a running account and the assessee had credited the amount to a claim account only. He also submitted that M/s Yadav Transport Co. had been dissolved. He placed reliance for the proposition that loss claimed on account of malafides of a Manager not allowable on Mask and Co. vs. CIT (1943) 11 ITR 454 (Mad), Cineramas vs. CIT (1977) CTR (P&H) 145 : (1977) 110 : ITR 762 (P&H)regarding allowability of loss in the year or in the subsequent year. Reliance was placed on Associated Banking C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the case of CIT vs. Nainital Bank Ltd. (1965) 55 ITR 707 (SC) the same view was reiterated by their Lordships. In the case of CIT vs. Nainital Bank Ltd. In (1966) 62 ITR 638 (SC) the issue was loss of jewellery pledged with the bank in decoity whether it was allowable or not. The observation of their Lordships was: "(i) That the amounts paid by the Bank were expenditure laid out for the purpose of its business and allowable as deductions under s. 10(2)(xv) of the Indian IT Act, 1922. The settlements with the constituents and the consequent posting of entries in its books of account could not be regarded as mere forbearance to enforce its claim to recover the loans advanced. The settlement consisted of two constituent elements--paying by the bank of the value of the jewellery pledged with it against the receipt from the constituent of the amount which was recoverable by the bank. The first element of the transaction would appropriately be deemed expenditure and such expenditure having been laid out for protecting and furthering the business of the bank was properly admissible under s. 10(2)(xv). (ii) That the sole question was whether the bank in incurring the expenditure acted ..... X X X X Extracts X X X X X X X X Extracts X X X X
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